In yet another mortgage tie-up, Guild Mortgage has agreed to be acquired by Bayview Asset Management.
It’s pretty big news in the mortgage world because Guild was the 11th largest mortgage lender in 2024, per HMDA data.
And ultimately not that far off from being in the top-5 nationally if they had mustered just a little more loan volume.
Once combined with their acquirer, who happens to own a major loan servicer, they could make an even bigger splash and grow to be closer to other elite names in the space.
The deal also takes Guild private for about $20 per share, which could change how they operate going forward.
Guild Mortgage Will Combine with Lakeview Loan Servicing for Recapture Opportunity
The story is a familiar one lately. A mortgage lender linking up with a loan servicer, similar to Rocket’s acquisition of Mr. Cooper.
What’s interesting here is Bayview Asset Management happens to own the nation’s largest mortgage loan servicer, Lakeview Loan Servicing.
Slightly confusing given all the views in the names, and the bay versus lake, but stay with me here.
This is a similar play to the Rocket/Mr. Cooper merger, with a loan originator (Guild) combining with a loan servicer (Lakeview Loan Servicing).
While Lakeview is a major loan servicer (and their website still says “Largest mortgage loan servicer in the U.S.”), I believe Mr. Cooper is technically bigger.
Mr. Cooper also says on their website, “We’re the largest mortgage servicer in the country-with over 5 million customers.”
Regardless, it’s the same strategy, except Guild Mortgage is a distributed retail mortgage company and Rocket is consumer direct. But once the loans are originated, they will all stay in-house.
Guild says it operates a “coast-to-coast distributed retail origination model,” while Lakeview says it has 2.8 million mortgages in its servicing portfolio.
Over time, that number will likely grow as Guild feeds Lakeview, thereby creating additional recapture opportunities.
That in turn theoretically creates more origination volume, and so on and so forth, perhaps propelling Guild into the top-10 mortgage lender list and beyond.
This has been a key strategy in the mortgage playbook lately without loan origination volume falling off a cliff.
It’s easier to mine your own database for prospects than it is to go out and look for new prospects. And probably a lot cheaper too!
The question is if it’s good for customers, who may not look beyond their original lender, even if the interest rate is higher, or the closing costs more expensive.
Guild Mortgage Will Continue to Operate as an Independent Entity
After the merger, Guild Mortgage (NYSE: GHLD) will continue to operate as an independent entity, which makes sense given their established retail brand.
But instead of being a public company, it will go private and shareholders will receive $20 per share.
That’s up about 25% from the prior close and values Guild at around $1.3 billion. Also not a bad premium above the company’s 52-week low around $11.
As noted, Guild will also work “in close partnership with Lakeview Loan Servicing” to create a new mortgage ecosystem that combines loan origination and servicing.
The company said “there will be no material change to Guild’s brand, business operations or customer experience as a result of the agreement.”
Guild’s executives and management teams will also remain, though it’s unclear if there will be any operational layoffs as a result of the merger.
Guild Mortgage was founded all the way back in 1960 and is licensed in 49 states and the District of Columbia (New York state the only exception).
The company funded $22.8 billion in home loans last year, with a near-90% share coming from home purchase lending.
They were most active in the states of California, Colorado, Missouri, Nevada, Oregon, Texas, Utah, and Washington.
